SEC’s proposal to scrap key NMS rules a major unlock for tokenized US stocks: analysts
Galaxy's Thorn said this would remove barriers that prevented DeFi automated market makers from trading tokenized US equities at scale.
The Securities and Exchange Commission has proposed eliminating key National Market System (NMS) rules, a move that analysts say could significantly boost the development of tokenized US equities. According to Galaxy's Alex Thorn, the regulatory changes would remove substantial barriers that have prevented decentralized finance automated market makers from trading tokenized US stocks at scale.
The NMS rules currently govern how US equity markets operate, establishing requirements for order execution, market data, and trading protocols. These regulations have historically created compliance hurdles for DeFi platforms seeking to offer tokenized versions of traditional US stocks, limiting their ability to provide liquidity and execute trades efficiently.
Industry experts believe the proposed rule changes could unlock substantial growth opportunities for the tokenized securities market. By removing these regulatory obstacles, DeFi platforms would gain greater flexibility to create automated market makers for US equity tokens, potentially increasing liquidity and accessibility for retail investors. The development could also accelerate the convergence between traditional finance and decentralized protocols.
Market participants will be closely monitoring the SEC's timeline for implementing these changes and any additional guidance the regulator provides. The proposal's progression through the regulatory process could determine how quickly DeFi platforms can capitalize on expanded tokenized equity trading opportunities.
Source: The Block
